Advantech SRP Business Model Creates New Value in Intelligent Services

Press release [Thursday 21 March 2013]

Advantech (2395.TW), a global leader in the industrial platform computing and automation device market, held its investor conference today and announced its 2012 consolidated financial report. Consolidated revenue was reported at approximately NT$27.55 billion, an increase of 4.2% compared with 2011; operating margin was NT $10.93 billion (39.7% gross margin); and net profit after tax was NT $3.49 billion, which represents about NT $6.22 per share after-tax earnings for the year.

Advantech President Chaney Ho said that after two years of transition, the world is now firmly entering an intelligent era in technology. This year, keeping this theme in mind, Advantech will provide services to meet the needs of various industries including providing cloud infrastructure, cloud intelligence services as well as services related to smart cities and the internet of things. Advantech will also develop strategies to augment global distribution and to assist business organizations in taking advantage of the new services.

Chaney also announced a change to the organization. In the past, the organization was structured along geographic or product boundaries. Today, the new organization will be based on vertical sectors and applications. As a result, it has been realigned into three Master Business Groups (MBG): AASECO (Advantech Automation Sales Eco-Partners, AASECO) which serves automation system integrators; the Embedded Design-in Group to service equipment manufacturers; and the iServices Group to serve solutions providers in the creation of intelligent services. The organizational changes, chosen to drive business forward, are based on two major criteria: vertical sectors and applications. In the area of global deployment, in addition to continued steady expansion of high-end markets in Europe and North America, research coming from the newly developed collaboration think-tank, the Advantech + Technology Campus (A + TC), has identified more business opportunities in the emerging markets of Russia, India, Israel, the Arab states that make up the Gulf Cooperation Council (GCC) countries, and the Latin American market.

Advantech Intelligent Services (AiS) will also provide a new Solution Ready Package (SRP) business model to the market. Advantech Intelligent Services Vice President Ken Yu said that as the paradigm in technology continues to shift over the next decade to create the intelligent era, "services" will replace "products" in mainstream market demand. Additionally, following global trends in urbanization, intelligent cities will flourish, with innovative services, interconnected and integrated devices marking a significant change in the mode of operation in the industry.

Ken went on to explain that the new SRP business model dividing the AiS organization into five business units was developed to fulfill requirements of the Greater China market. The new organization will divide AiS into five business units offering solutions in the following sectors: medical (iHospital), retail (uRetail), smart-city (uCity), intelligent-factory (iFactory), and intelligent-building (iBuilding). The five business units will provide a set of value-added application services, each with a different industry focus. With an in-depth industry application operating just like a normal system integrator, the SRP business model will include a professional marketing and IT team, while strengthening the sales and service teams. Advantech will also strengthen its own capabilities in various fields through its "Partnering for Smarter City Solutions" platform, which includes mergers and acquisitions, alliances with industry partners and industry/academic cooperation such as the TiC100 business model competition.

Chaney Ho stressed that the Advantech SRP business model is the best model that has been developed to date, combining intelligent technology with Advantech's past three decades of experience, and boosted by the merger with BICOM Information Technology and alliances with academic and government organizations. Advantech continually enables technology for an intelligent planet with strategic initiatives that further the development of the organization and its business models. The SRP business model will serve to help Advantech become a leading innovation enterprise provider in Greater China, as well as assist different industries in accelerating their own growth in intelligent operations.

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